Oklahomans for Internet Sales Tax
- Dec 4, 2015 | Gail Cole
Sales tax parity is the focus of the newly formed Oklahoma Retail Merchants Association. The organization will work towards creating equity between brick-and-mortar stores, which are required to collect and remit Oklahoma sales tax, and remote Internet sellers, which are not.
Kiley Raper, Chief Executive of the Oklahoma Retail Merchants Association, told The Oklahoman, “The biggest issue we run into is that our towns and cities rely on sales tax for all of their functions. … [M]ost of our municipalities are wholly funded by sales taxes. [Sales tax revenue keeps] cities alive and thriving and allow[s] them to grow.”
He added, “Everyone needs to pay sales tax. It can’t just be brick-and-mortar.”
Businesses without nexus in Oklahoma are not obligated to collect Oklahoma sales tax. However, out-of-state online sellers that don’t collect and remit Oklahoma sales tax “must provide notification on their retail Internet websites or retail catalogs and invoices provided to their customers that use tax is imposed and must be paid by the purchaser, unless otherwise exempt.”
In spite of the law, many consumers do not remit use tax and payment is rarely enforced. The rise of Internet shopping and the lack of compliance with consumer use tax have led to a drop in sales and use tax revenue. In Oklahoma City, for example, October 2015 sales tax collections were 2.6% below October 2014 collections. Use tax revenue fell by 12.3%. As a result of the declining tax revenue, the city is instituting a hiring freeze.
Lobbying to extend sales tax to Internet merchants based out-of-state will take time. Meanwhile, the Oklahoma Retail Merchants Association is encouraging Oklahomans to shop local.
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